Yevgeniya Barabash
BA 2196 Section 701/Gerst
Writing Assignment #2: Economist Article

The article “Guides through the swamp” (March 24, 2012) discusses newly imposed challenges in the already complicated world of the tax preparation industry. Last year the IRS introduced a new licensing and continuing education requirements for tax preparers. Unsurprisingly, big firms such H&R Block and TurboTax support the licensing and already set up in-house training programs. Additionally, IRS stepped up to regulate “refund anticipation payments,” which, in reality, were predatory loans with high interest rates. Both of these actions will negatively impact “mom and pop” small tax preparers, in form of higher cost of licensing and loss of additional interest income. The net result will be less competition, fewer jobs, and higher prices. In the end, consumers will have to pay for the costs associated with licensing and “continuing education,” or prepare takes on their own. This means more customers for giants H&R Block and TurboTax.

Guides through the swamp
A big shake-up for America’s tax-preparation industry
Mar 24th 2012 | NEW YORK | from the print edition * *

PAYING tax always hurts. But America’s tax code seems designed to make it hurt as much as possible. It contains 3.8m words, and was changed 579 times in 2010 alone. Taxpayers must wade through a swamp of gobbledygook: tax compliance consumes 6.1 billion man-hours annually, according to the Internal Revenue Service (IRS). That’s the equivalent of 3m people working full-time, year-round—more than the entire federal workforce. Each year, Joe Taxpayer must sign a thick return that he cannot plausibly understand. And woe betide him if any of its contents should turn out to be inaccurate.
The obvious solution would be to simplify the tax code. The IRS’s National Taxpayer Advocate begs